USD/JPY Forecast July 2-6 – The rosy glasses are still on

Dollar/yen made a cautious move to the upside as trade war fears were subsided quite quickly. Can this last? A busy start to the week features the FOMC Minutes, the NFP, some surveys from Japan, and the recurring theme of trade wars.

Markets reacted with a shrug to the US tariffs on China and the counter-duties by the world’s second-largest economy.

USD/JPY fundamental movers

Some relief in the trade wars

The Trump Administration made threats against the EU early in the week but markets later cheered the move to allow an independent institution to monitor Chinese investments, a move that seemed like a softening of his stance. This helped remove flows to the safe-haven yen.

US data was mixed. The final GDP disappointed with 2% annualized growth while the Core PCE surprised with a move to 2%, the Fed’s target. Durable goods orders missed on the core but came on top of upward revisions.

Japan’s Tokyo inflation report surprised to the upside on all measures, including the all-important figure that excludes fresh food. This did not help the Japanese yen.

FOMC minutes, full FOMC buildup and some Japanese data

The first week of the month and the quarter opens with a full buildup to the Non-Farm Payrolls. The ISM Manufacturing PMI on Monday is followed by the ADP NFP and the ISM Manufacturing on Thursday, all leading to the big release on Friday. The NFP is expected to result in a “more of the same” publication: around 200K jobs gained and a monthly wage growth of 0.3% in June, identical to that in May.

In addition, Thursday sees the publication of the all-important FOMC Meeting Minutes for the hawkish hike seen in June. The Fed signaled two additional interest rate raises in 2018 and Fed Chair Powell sounded very optimistic about the economy. It will be interesting to see if the lengthy document includes insights about trade relations. If the Fed expresses concerns, markets can suffer.

About Author

Yohay Elam – Founder, Writer and Editor
I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me.
Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.
Yohay's Google Profile

Comments are closed.

Top Brokers

About ForexCrunch

Forex Crunch is a site all about the foreign exchange market, which consists of news, opinions, daily and weekly forex analysis, technical analysis, tutorials, basics of the forex market, forex software posts, insights about the forex industry and whatever is related to Forex.

Disclaimer

Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit, so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.